Meanwhile, Secretary of State John Kerry named Martin Indyk, a former U.S. ambassador to Israel, as his special envoy to guide the Israeli-Palestinian peace talks.

Obama said he was "pleased" to see Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas accept Kerry's invitation to formally resume direct final status negotiations and send senior negotiating teams to Washington D.C. for the first round of meetings.

"This is a promising step forward, though hard work and hard choices remain ahead," the president said in a written statement.

The Israeli and Palestinian negotiators are set to begin their "initial talks" on Monday evening to lay the groundwork for final status negotiations, which will last at least nine months.

The breakthrough comes as a direct result of Kerry's intensive shuttle diplomacy during his six trips to the Middle East region since taking office on Feb. 1. And Obama himself traveled to Israel, the West Bank and Jordan in March to press ahead with the peace efforts.

The Israeli government on Sunday approved the release of 104 veteran Palestinian prisoners during the upcoming negotiations, meeting a demand by the Palestinians for the resumption of talks.

The initial meetings on Monday and Tuesday will be attended by Israel's chief negotiator and Justice Minister Tzipi Livni and Netanyahu's personal envoy Yitzhak Molcho, while the Palestinians will be represented by chief negotiator Saeb Erekat and Mohammad Shtayyeh, a senior member of Abbas' Fatah party.

The meetings will develop "a procedural workplan" for how the parties can proceed with the negotiations in the coming months, according to the State Department.

"The most difficult work of these negotiations is ahead, and I am hopeful that both the Israelis and Palestinians will approach these talks in good faith and with sustained focus and determination," Obama said, adding Washington "stands ready to support them throughout these negotiations, with the goal of achieving two states, living side by side in peace and security."

Stressing "reasonable compromises" as part of the peace efforts, Kerry announced Indyk as his new special envoy for Israeli- Palestinian negotiations, calling him a "realistic" man with "a deep appreciation" for the history of the Israeli-Palestinian conflict.

"Going forward, it's no secret this is a difficult process," Kerry told reporters at the State Department, with Indyk at his side.

"If it were easy, it would have happened a long time ago," he said. "It is no secret, therefore, that many difficult choices lie ahead for the negotiators and for the leaders as we seek reasonable compromises on tough, complicated, emotional and symbolic issues."

Jerusalem, security, the Jewish settlements, borders and refugees are among the core issues to be covered under the final status negotiations.

"I think reasonable compromises have to be a keystone of all of this effort," Kerry stressed.

Indyk, 62, served as assistant secretary of state for Near East affairs, special assistant to the president and senior director for Near East and South Asia in the National Security Council under the Clinton administration.

He was U.S. ambassador to Israel from 1995 to 1997 and again from 2000 to 2001, and joined the Camp David peace talks in July 2000 that broke down due to differences on the issue of final status.

He currently serves as vice president and director of the Foreign Policy Program at the Brookings Institution, a think tank in Washington D.C. He succeeds David Hale, who left as the Mideast peace envoy last month.

Peace talks between the Israelis and the Palestinians have gone off and on during the past two decades, and Netanyahu and Abbas last talked to each other for about 16 hours in a period of three weeks in September 2010, under the mediation of the Obama administration, before leaving the negotiation table over Israel's refusal to extend a ban on settlement building in the West Bank.

RAMALLAH, July 29 (Xinhua) -- Palestinian and Israeli chief negotiators are meeting later on Monday in Washington to prepare for the renewal of their peace talks that were suspended in October 2010 due to Israel's expansion of settlement activities on occupied Palestinian lands.

Nabil Abu Rdeineh, spokesman of the Palestinian presidency, said in a press statement that the meeting is aiming to develop a practical plan for both sides to achieve progress within the next few months." Full story

UNITED NATIONS, July 29 (Xinhua) -- UN Secretary-General Ban Ki-moon on Monday expressed his "strong support for the resumption of credible negotiations" between the Isarelis and Palestinians, which is scheduled to begin Monday in Washington.

The secretary-general made the statement as he was meeting here with the justice minister of the State of Israel and chief negotiator in the Israeli-Palestinian peace talks, Tzipi Livni, deputy UN spokesman Eduardo del Buey said at a daily news briefing here. Full story